Bobby Dysart 00:19
Hey everyone, thanks for for jumping in here. We'll get started in a couple minutes while people trickle in. My name is Bobby Dysart. I'm a sales leader at COMPA and Charlie's going to jump on here in a second and get us going
Bobby Dysart 00:47
Also, as a heads up, I'll be manning the chat. So as questions come up, feel free to engage me there and I'll try to get everyone's question answered
Charlie Franklin 01:49
Folks, let's go ahead and get started. Thank you everyone for joining today. My name is Charlie Franklin. I am co founder and CEO of COMPA. COMPA empowers talent acquisition teams to lead the change with offers as the market shifts towards patrons patency. I founded this company to make compensation fair and competitive for everyone after a decade as an HR practitioner focused on this problem. I'm joined by my friends Tauseef Rahman, who I'll introduce in just a moment. Today we're going to hear about rethinking market data in the new era of pay transparency. And our objective is to elevate the conversation in our profession, on how we measure the market and ultimately compensate our talent. Given that so much has changed in the past two years. So before we begin, a couple notes, we encourage you to submit questions throughout the webinar, and make sure you upvote questions that you want answered, feel free to share your thoughts and insights in the chat. And if we cannot answer all the questions within the allotted time, we'll do our best to follow up with response. And finally, the slides and recording in this webinar will be shared with you within 24 hours. Now I would like to introduce Tauseef Raman, Tauseef is a partner at Mercer, where he is the career business leader for Northern California and Hawaii. And for nearly 15 years, he has helped organizations attract, retain and engage their talent. And he is an expert on compensation and people analytics, Tauseef has focused on trends in pay transparency, and has contributed his thought leadership and publications such as Bloomberg Forbes, and Fast Company. So with that, let's go ahead and get started to see if welcome. Tell us about how you became interested in pay transparency. And what's top of mind for you today.
Tauseef Rahman 03:45
Yeah, thanks, Charlie, for having me excited to be here. And thanks for folks for joining. So I'll do a quick backstory in terms of how I ended up in human capital in particular, and then talk about pay transparency. I studied human capital economics as boring or as exciting as that sounds. That's what I studied in undergrad and I wanted to apply econometric modeling and thinking to the real world and you know ended up joining Mercer and that you know, that's that's kind of how it all began on the topic of pay transparency fairly I know what you're talking about this for some time. Honestly, what caught me is how I was a bit surprised how unaware it seemed companies were when some of the pay transparency legislation started to pop up I'm being very specifically California's Assembly Bill 168, which went in effect January of 2018. And you know, ever since then, I've been kind of following it. It's been researching and it's been really interesting seeing that light switch go off from like, it's an you know, out here in California thing to something that's really more coast to coast and have seen incredible uptick In clients asking questions and moving from avoiding the topic to planning for it and addressing it head on.
Charlie Franklin 05:11
Interesting I, I think for me, the the idea of pay transparency has evolved quite a bit. When we talk about an era of patrons, parents see that the means different things for different people. For some, it's employees, circulating Google Sheets and demanding radical transparency from their employers. For others, this is highly publicized lawsuits on issues like discrimination and pay equity and disclosure. Clearly a trend is growing. How would you define the new era of pay transparency? From your perspective?
Tauseef Rahman 05:50
Yeah, no, I appreciate that question. So a couple things come to mind. First thing I'll mention is I think it's an oversimplification to view it as a legislative only type of topic. Not to say it's unimportant, you know, comply, all that good stuff. But that's the baseline easy stuff, maybe it's not so easy, because it varies kind of state to state, fine, whatever in localities, but, but really a few things. It's an employee driven expectation, candidate driven expectations, which are, they can only chat. And when you think about the TA side, that niche in particular, but it's really kind of the societal expectations around it, the employee expectations around it. But, you know, personally, I see it a bit of a, as a bit of a long time coming, we saw these things start to pop up when you, and I'm not going to mention the specific companies. But there have been no shortage of websites that fill the void of missing information that were you self submit, and this and that. And what I tell clients and those that I discuss with this is it's in an information gap that's been needing to be filled. And if you don't really start to tell the story on pay transparency, you're going to have many different people telling many different stories. And sure, the legislation provides some baseline of what needs to what mores need to do to comply. But what's that broader narrative in the sense of employee experience, candidate experience, that becomes really important?
Charlie Franklin 07:27
Yeah, I think about I use a term from my education, economics, what comes to mind for me is information asymmetry. And it's basically this idea that all of the data sits on the side of the employer and non on the side of the employer candidate. I think that's an assumption, or just like a way of acting that most companies have been able to maintain for a long time. But that's, honestly, that's changing. I see this kind of like the social contract between the worker and the employer has shifted where people show up with very specific expectations about our data, right. And they come with our own data. And so I think increasingly, enterprises should be confronting pay transparency with your what are the pieces of data that we want to bring into conversations about pay? And how can we meet people where they are expecting just greater accountability than kind of the status quo practices we have today?
Tauseef Rahman 08:26
Yeah, I agree with that. And I think, you know, I think of things like the National Labor Relations Board, right. And some of the other laws on not employers not prohibiting employees from discussing salaries, right, things like salary history ban on not asking about prior salary. So to think of pay transparency is something and I'm in isolation and aware, an unrelated rather to other things. It's not really fair, there's a lot of initiative is not the word, but it's a lot of ideas coming together. And it's this ecosystem around transparency. And to view it as a standalone topic, kind of misses the point of there's a lot of other stuff that's been going on. And to your point on information asymmetry. There is a reason why the NLRB and other org said no, you can't stop Charlie and Tessie from talking about their pain. Right? There's there's a reason for that. And, you know, see, pay transparency is a bit of a an evolution there and I can understand the complexities and challenges that a lot of my clients are faced with. Right. How do you move from a world where you held on to all the cards to one where you're laying all the cards out on the table, filling in decades of gap on the employees side? As to how When the widen the why, and I'm not seeing organizations have been saying nothing but you know, to the level of like here, the ranges, etc. That's, that's definitely an uptick in effort. And, you know, I want to recognize that right, that's it's a lot of work.
Charlie Franklin 10:16
Let's talk about the impact of pay transparency on market data, how might we rethink what it means to, to represent the market, in our analysis in the policies we set as companies in the pay decisions that we make? And ultimately, and how we communicate pay to employees and candidates?
Tauseef Rahman 10:41
Yeah, I mean, it's, I mean, this is the complex, complex question. Right. So communicating, there's a couple of things right, what do we what do we want to communicate? What is it that we're communicating? What's the market data that we want to use? viewing this as a bit of a competitive advantage, you know, potentially, is something for organizations to consider? Thinking a couple of steps ahead. What does it look like? Six months, 18 months after your org and other orgs have put out, you know, ranges for for roles. definitely seeing a lot of organizations think through, what's the narrative we want to tell on on the data and the data sources and the validity of said data? Because a bit of the waving of the hand, and saying, Well, no, no employee, you don't have access to fill in the blank comp survey. And therefore you don't know what's going on. Not going to play too, too well. And I want to acknowledge in this labor market, right, you know, things can be very different and understood and other situations, but there's a lot of things that are driving this confluence events. And I keep saying that, because it's tight labor market, geographic, you know, flexibility. You know, certainly questions around inflation, all of this is, you know, maybe there were a couple of eyes on paying and pay levels. And now there's a lot of eyes on bad day levels.
Charlie Franklin 12:28
Yeah, I think about a couple of personal experiences. Back in 2018, I took a new job. And I was moving from the San Francisco Bay Area to Seattle. And I remember when they made the job offer to me, they said, Well, you know, because of because you're gonna be in Seattle, your offer would be x, but actually, it's going to be y, which is a little bit lower, because that's in a different zone for us. And I was kind of, like, good for you. I don't care what your zones are. That's not what the market is to me. And I said, No thanks. And that put me in a position where I had to negotiate. Actually, the market in the sense is not geo tiered, based on whatever internal hierarchy they had. It's whatever the willingness to pay is, and how the the transaction occurs between the candidate and the employer. And I think of that example, because, obviously, I mean, it's been in the conversation for well over a year, two years now, on some of the heuristics that completers use, on just conflating cost of labor with cost of living, right, and this idea that, if you're in Nashville, you're paid differently than in San Francisco. And as that assumption has deteriorated, and how we define the market, I think there's just this broader realization, not just among the comp professionals and the recruiters of the world who are experiences on the front lines, but also among candidates and employees who realized that their work is of equal value, regardless of where they are. And so, you know, geography is one piece of it, but just examples like that show me that companies need to kind of catch up to where people are in this conversation.
Tauseef Rahman 14:09
Yeah, very much. And we see that very hot in the data, right. So I've had the chance, you know, being at Mercer, looking at some of the data and doing that econometric research and, you know, we do see statistical differences in how different types of jobs different job families are paid in different geographic locations. And it varies substantially from what the national conception of an E ri or a BLS would say the geo differentials are and and you know, what, it's really forcing and this is where I appreciate the complexity clients face is the simplifying assumptions can no longer be made. Right. Right. And I think you know, organizations may Add simplifying assumptions out of malice, whatever I, you know, it was a simplifying assumption for a reason. But the realities have started to diverge so far from the simplifying assumption that you can no longer make kind of these broader comments. And so now that the topic of pay transparency, I think people think, oh, it's sharing the job, you know, their pay range for position. Yeah, sure. But to your point, Charlie, why is the pay range for the exact same position you are doing in San Francisco Bay Area, different from the one in Seattle? So at this next level of question, right, of how do you not just put those ranges out there? But how do you educate, explain redemptively orient employees about the rationale for pay differentials for certain types of jobs versus others? And so this is where my comment of moving beyond the compliance really kind of comes into play?
Charlie Franklin 16:01
Yeah, I, I couldn't agree more with that. And you made a comment that I, I want to press on a little more, which is that there's, there's usually not anything malicious going on here. And I want to call out for, for our friends on the call in comp, they do their very best to keep up with a very dramatically fast changing market to support 1000s of pay decisions every year. And I think similarly, for whether you're a recruiter on a talent acquisition team or an HR, just understanding how all the data is brought into every single conversation about pay. This is complicated. And everything that's happened, in particular in the past couple of years has really just upended traditional practices. I remember, when we were initially found in comp a couple of years ago, I talked to a number of friends about what data looks like in these decisions. And I remember, he may be on the call Ben Carter. He's a total rewards leader over workday. I had mentioned that doesn't feel like there's enough data in some of these decisions. He said, No, no, that's not the problem. The problem is there's too much data. And it comes from everywhere. Everybody walks into a conversation with their own preconceptions about what the market is, whether it's from a crowdsource site that they found by Googling, whether it's from they bought this survey, they bought that survey that using this guideline or that guideline. So I think we talked about information asymmetry, but a big part of like, what is changing about market data? Is this recognition that it's not just how you get to your pay ranges, but it's what you communicate, and how you put them into context, when you're making a decision and communicating that to an employee or a candidate.
Tauseef Rahman 17:42
And the point that Aladdin and surrogacy some great questions coming through is V. malt, the multi time dimension of this, right, because what you communicate at a certain point in time, based on certain logic and what's happening in the market, it can change. Right? And I don't mean, you know, just it can change over the years. That's, that's very true. But it can change within months. Right. Yeah, you know, within a couple of quarters, certainly. And makes being able, putting this, I'm gonna make a simplifying assumption, putting aside the incredibly hard work of staying on top of market data movement, which is work unto itself, you know, fully appreciate that. Determining and making those calls on communicating it, does it go up? Does it go down? What are we going to do? Are we going to wait and see, there's, you know, a lot of to your point, Charlie, data and expectations, right, the survey data will say one thing, the employee expectations will say something else, your competitors are gonna start to dip their toe in and do something else. And very much the employee X experience becomes really important, like, what do we say and do considering how things can move, right in terms of market data.
Charlie Franklin 19:08
So we're talking about market data set in the context of this era of pay transparency, talent acquisition teams are engaging with the market every day when they talk with their candidates. And with all of the pay legislation affecting how job postings are made, what kinds of conversations you can have about pay with candidates with the offers that you ultimately make, in a sense, recruiters are on the front lines of patronage currency. Yeah. So my question for you is how could we turn to talent acquisition as a source of fresh insights about the market?
Tauseef Rahman 19:48
Yeah, that's that's a great question, Charlie. And no one acknowledged right, you know, Tina, ta teams have, as you said, been on the front lines, they've always been a source of information and maybe kind of tying it to your past. Comment, it's no shortage of information, right? You know, in my mind, there's three things in terms of using kind of TA inside new data. One is, how do you calibrate it? Right? Because there's info coming from TA and how does that stack up with market data versus going to, you know, past offer acceptances? And certainly, you know, internal internal comp data. How do you validate it? And what I mean by that, and I say this with respect is the one off, I lost Charlie, the, you know, the Charlie didn't accept our offer, and he accepted somewhere else. And therefore, I have this one single data point that I'm going to over index on. Right, how do you mitigate that? Confirmation bias? Right, and kind of exception bias that comes into play? And then the other piece is integrate, right? And I think that's the key on how do you use any of that information as a, as another source of information to, to to drive this, and I will say, I think one of the things that they transparency, you know, having it play out, it's going to be complex, it's going to be a little rough. And, you know, helping clients think through how to navigate it is has been, you know, certainly keeping us busy. And the additional piece of information that will start to be out there kind of, for folks who want to get a look at it is what are the pay ranges for various job postings, that people, you know, competitors are putting out there. And so, you know, I can only see the role of TA, and I don't mean specifically recruiters, but those who are understanding the go to market competitiveness of offer ranges, relative to the offer, you know, to the real offers versus the posted ranges. For other companies, there's going to be even more info to integrate,
Charlie Franklin 21:59
I agree. And I, I think about, I wonder if any comp folks listening can relate to this. When I was in comp, at a large company, occasionally, actually, pretty often, I would get recruiters coming to me with their hairs on the hair on fire, like, we have to make an exception and pay somebody, our guidelines are totally out of whack. And it was really, I had a ton of empathy for the position they're in and often was tasked to solve whatever is going on, especially if it was a high profile hire. But it was really difficult, because you're dealing with anecdotes, sometimes literally, you know, screenshots and sort of paragraph text threads, and you're like forensic ly trying to piece together what's actually going on in the market. And it was just so hard to understand. And I, I do see, just more generally, there's this opportunity, if we can find the right higher bandwidth collaboration between the talent acquisition and the compensation teams. I mean, TA is your interface with the market. When we talk about market data, it's sort of like this esoteric, abstract thing. You know, like, if you're, let's like, take the housing market, for example, if if you're considering selling your house, it's one thing to read an article in The New York Times that says the housing market is doing this or that it's another thing entirely what's happening in your city, in your neighborhood, for your house with your number of bedrooms. And so what I think about in the corollary in the talent world is exactly what you were saying, Who are our top talent, competitors? What are they doing? Or when we talk to candidates? What do they want? And how does that compare to our pay strategy, and just building that connective tissue between your market interface, which is talent acquisition, and the kinds of comp strategy decisions that you're trying to implement? To me, that just seems essential to be able to move faster when everything's changing. And assumptions, like geo tears just aren't working in the same way they did. So it just feels like these teams have to build this bridge between each other in a more effective way.
Tauseef Rahman 24:16
Yeah, spot on. And, and that's where the role of TA in partnering closely with calm right, you know, comes comes to mind very much shorter, as you said. And then broadly speaking, right, and that's just on the acquisition side, right. Of the folks, you have talent, what about the talent you have acquired, right, in terms of communicating that comp internally going for that remains competitive, and all of that. So I'm acknowledging the complexity of it. And you know, and you know, that's where have the additional insight in partnering. And I've seen this work well with some of my clients where the competent GA teams working really closely Hand in Hand looking through the process, not just for only from a TA lens, right, not just for the getting the offer accepted, but from bringing in that market insight to provide an input to your point, you know, that one data point is not going to be like, Oh, well, Charlie accepted for this, and therefore, this is the going rate. That's not the reality. But But how do you not lose some of that value that you're going to get, you know, from, from, from the TA team, for sure.
Charlie Franklin 25:37
I think that's 100%. Right. And, and I'll just add, when, when you hire somebody, and you know, the the market transaction occurs, right, there's an offer, it's accepted. The thing is, and this is, in the era of pay transparency, you don't stop selling that candidate who is now an employee on whether to work for you. At that moment, they're continuously deciding whether they want to do that. And that's only more true, the more data becomes available to everybody, because they're constantly checking, I compare it to, for anybody who's familiar with like the enterprise SAS business model, when you begin working with a customer, the vast majority of your revenue occurs after the sale, because they're deciding whether to renew with you, it's the same thing with the employees. So you may bring someone in for a $90,000 base salary, but a year later, if the market is skyrocket, it's worth 110, there is a good chance now that they actually know that. And if you wait and are in the back of your heels and say, Well, you know, it is what it is, and we have a 3% budget, you're going to be losing your best people. And so I think, you know, whether you're getting these real time market insights from your talent acquisition team, or wherever you're getting them, you should be constantly pressure checking what is happening with the market against current employees. I think that's someone something that all of us know, but it's just become increasingly true, the more data has proliferated.
Tauseef Rahman 27:10
Yeah, I'll comment on that one particular piece, and that you mentioned on the merit badges, and I fully appreciate that the disconnect that we're seeing, frankly, with clients, because one of the things we do is we track, total comp, right, just like how much is being spent on a fine per FTE basis. And we know, it kind of, you know, varies from work to work, but for the same company, right, you know, controlling for the levels people are at etc, we're seeing the amount of spend UK spent on compensation increase far ahead of the merit budget, right, and what it's reflecting, right, Charlie is a bit of what we're chatting about is, in certain industries, certain types of jobs, people are having to pay more, right. And so just the total spend on cotton has been going up. And so there was a time when the merit budget kindness, sorta we all knew and didn't really fully cover an increasing comp costs. But you know, it was close enough. But we made a simplifying assumption. We're seeing, you know, substantial differences, depending on the company where, you know, the merit that the reporting are three and four, and we understand why money doesn't grow on trees. But the reality is, like, Fine, that's the merit. But in terms of the reality of the amounts that you're offering, and paying people, you know, total, same company, same type of jobs over time of eight to 12%. So amazing. But if the disconnect, right, well, then the merit, but the budget hasn't caught up with the reality of what employees know, which is, you know, pay compression challenges of bringing someone new in only six months later, you know, with 20k, higher salary, right, than someone brought in six months earlier.
Charlie Franklin 29:03
Yeah, I think about the times where, when I used to drive for my commute to work, I'd have, you know, marketplace on and tyrosol would be reading some report that, you know, according to so and so the average merit budget increase this year is 2.7%. And it's like that definition of what's happening, the market is just so slow and lagged compared to what people's actual experiences are now, it's just our view is just changed on this. And so I think that total rewards teams need to find ways to understand what's happened in the market in a more finely tuned way. And then, as we discussed, communicate that in a more effective way to employees. I want to wind up the conversation by asking you one question. Before I do. We are going to shift to q&a. I'm following this last set of questions and so please go ahead and drop those into the q&a or into the chat, and we can address those for you. But tell Steve to kind of wrap up. Before we do that. I always like to ask because this is such a complicated, large problem with so many dimensions for folks who are managing making decisions on how to compensate whether it's with offers or current employees or whatever, what's one thing that an organization can do today to have a better measure of the market in this new era of pay transparency?
Fair, questions or there's, I think the one thing is to do actually, a combination of three things. One of them, market data is always going to keep you know, keep on it right. But what did the survey say? And make quarterly updates, find good employee perception, right? Feeding that in becomes really key? What does the employee perception on competitiveness of Bayfair? Is, and I don't mean just the broad engagement score sort of stuff, but like the very specific calm questions that have always been there. And we've seen fast movement in employee perception around that. And then the third of the related pieces like what's, what's the narrative possible for the current state today? Right? And what I mean by that market data will tell you one thing, right, employee perception will tell you something else. But then there's the reality of what the work can afford, what the structures are, where a human organization wants to place its bets. And I say this, because I don't think you know, you know, one of those things myself, you know, hopefully most words have some sense of it. But the triangulation between those three things, right? The market data deployed perception and that organization, context specific narrative as to why it's doing the things they're doing that that triangulation is, is really the key part here. And it does require that cross collaboration and comp has the market data, employee research as the employee data, right? There's probably some form of corporate comms or EVP team that's talking about the wider work at Kambah. Right. But what's that, you know, three way working group to really align on getting a sense of our market data says this, but our employees do something different. And here's how we're going to talk about it.
Charlie Franklin 32:36
Awesome. Well, with that, I want to turn it over to questions in the q&a portion of this webinar. Bobby, let me go to you have any questions come through the chat to get us started?
Yeah, hi, everyone. Again, Charlie. Tauseef, thank you for running through that feel like things are just getting ramped up? We got a few questions come in. So I will try to address those with Charlie here. Just a quick heads up our marketing teams going to pull on the screen. It's just a quick yes or no. So please engage with that. And then I guess to get started, Charlie, we will we sort of had the same question come in different forms from both Jackie and Jennifer. So I'm going to try to see if you can answer it, answer them both at the same time. So both sort of started with how to deal with market being so volatile. Right, Jackie, asked to ask verbatim how to deal with transparency when the market is so volatile. A Jen sort of added an extra bit to it, when the market is moving so quickly. And for FinTech roles, specifically, premiums are put on some rolls, but not all. How do you explain that those employees that don't get premiums?
Charlie Franklin 33:52
Great question. Tau, let me turn it to you any insights from your customer conversations out in the market?
Tauseef Rahman 33:58
Yeah, sure. Sure. You know that, you know, a couple of things. Right. So first piece on the market volatility. Definitely the tracking of the market, maybe you know, every other year or quarterly organizations are continuing to do that, how often they update the ranges that are used internally for practical purposes. I've seen organizations take kind of a longer term view in doing that. And in plain English is the market data jumps 10%, from q2 to q3, their structures don't jump that because they don't know what's going to come on the other side on the other quarter. So very much practically, practically speaking, I've seen clients do a kind of two quarter, three quarter trailing data kind of trend in terms of the market. The thought here being you have the ranges and the range on the upper side should accommodate what the organization's willing to pay for that competitiveness. The other piece in terms of the premiums versus not A super great comp, no question where we've seen this come into play and organizations have to address the book this head on is both on the pay transparency as well as the geographic pay adjustment when people move. Why is it that for certain job families, they're being paid nationally, and there is no pay differential upon relocation. But for others there are. And what it's causing some of our clients to do is basically be very upfront with employees about labor market supply and demand driving, the premiums being used versus not or pay adjustments being used versus not. And so I don't want to oversimplify it as simple as how do you communicate it? You do, you have to come up with a story to do it. But the reality is what what I've been seeing from a lot of my clients is, you know, people relocated through COVID, some people got pay adjustments, some people didn't, right, were 1824 months, and the employees themselves are asking the question, why did this job get a pay adjustment, but this other job did not. And companies are then saying, well, because different type of job, different labor markets, etc, etc. And where we're seeing this happen is organizations quickly follow that with saying, and because of the high demand for this type of role, here's the things you can do. And here's the support, we're gonna get for you to, you know, you know, switch your career and get the skills needed to go into this kind of more in demand role, which is far more complex than just saying, like, too bad. So sad, right, that some jobs have much tighter supply demand than others. But but it's it. If you don't say something, people will come up with a story. Yeah, I'll,
Charlie Franklin 36:49
I'll add some thoughts to that. You know, when when you hear pay transparency, you think of this sort of holy grail place where you're able to communicate everything, because there's nothing to hide. Yeah, reality is making 1000s of these decisions every year, it's impossible to make all of them perfect. And it's going to be a challenge to do that. At scale. I think the right place to start, especially in a volatile market, be more open with your employees and your candidates on what's happening. By open I mean, have PE conversations earlier, talk about what your philosophy is, what drives differences in pay, or at least what you aspire to drive differences in pay. And when you pull that conversation up, you should be building trust with us. This is a long term play comp planning should not be a once a year conversation. When you're dealing with candidates, you should not hold on discussing pay until you make the offer hope is not a strategy. I think people will understand that markets are very volatile, and they're not going to ask complainers to solve every problem in the world. But if you bring them into the conversation, in a way, it says, Hey, we value. These skill sets are really hot in the market right now. People have been moving around and we're taking a look at our pay differences by geography. What we care about us is compensating for performance or compensating for XYZ aligning to our values, starting to meet people where they are, I think you're gonna have a better experience at scale. And that's kind of the right starting place. There's a few other questions coming in here, I see some several questions kind of building on this idea of geo zones. Tao, what do you think about the idea of, I see a question about like doing away with geo zones, or just paying everybody in the US the same? And there's a question to about how does that translate to thinking about compensation internationally? I certainly know examples where folks have left the San Francisco's in New York's of the world to go live in Mexico City, or wherever, should we be paying them differently?
Tauseef Rahman 39:04
Yeah, so great question, again, something I've been following in writing. So there's, I'll talk about the reality of what the data show versus what organizations might want to do on that simplifying assumption. The reality of the data show are that job family by job family, there are effective geographic, different geographic pay differentials. And so what I mean by that, again, in plain English is, you know, we're in the, you know, I'm a customer myself, and I'm in the Bay Area, the national market data, you know, we'll say it's, you know, 30% above national, right, fine. But the reality is, it's not 30% above national for all types of jobs, right. It's for some, not for others. And so, organizations are faced with a choice, which is how do you do, do you do one of three things one, not differentiate geographic differentials by job family? Right. To differentiate job family is different differentiate God gifts for all job families universally. Right. And what I mean by that is accounting is plus 30 in Bay Area and so is, you know, tack is plus 30. Or the third option, which is used different geographic differentials for different types of job families. Right. And that's what the research data is supporting the employee communications on this is the challenge. It's not a question of what the reality of the market is. Right? It's very clear in the market data that if you were to look at the geo differential for a Chicago, right, Charlie, or, you know, Chicago boy in Chicago, relative to national, it'll say, I'm making this up 20%. For our accounting jobs, it's 18 or 17%. Right. But for tech tech jobs, it's more than 20%, above national. So how does one kind of communicate that and then to on, that I'm talking to, you know, nationally, internationally, because labor is not fluidly movable, from immigration, and many other reasons across borders, that is more of that justifiable reason as to why the labor markets are isolated in Canada relative to the US, right, maybe bad example, because we have NAFTA and all of that stuff, fine. But like, between France and the US, right, for like a non EU citizen. But if you believe in the idea of geographic mobility within the US, and it's, you know, we have our federal states and people are fairly fluid. There is a reason why we need to think about God zones within the US. But it's not comparable to think about Canada versus the US. And this is where it gets tricky, right? Are you paying for the work being done? Or are you paying for the length of the supply and demand to have that work done? In isolated labor markets?
Charlie Franklin 42:07
Yeah, I'll, I'll add, okay. So fundamentally, the issue is the markets are volatile, our norms are shifting. How do we manage this, because it's getting messy, quick, we're all feeling it. I would, for the comp practitioners out there, reach into your past experiences for places around the world or times when you've dealt with a volatile market and think about what worked? Well, I'll give one example that I'm familiar with, when I was a comp practitioner at a large enterprise, we had a team that actually to come to mind, we had a team in Argentina, and a team in Egypt, anybody who's dealt with those countries before, he probably just flinched. Because in Argentina, the inflation is so nuts that people literally, if you didn't somehow benchmark to the US dollar, what somebody has paid this month, compared to next month, or next quarter could be half. And so what we had to work out was a scheme that we and we talked to lots of other companies about What are potential ways to manage this thing at scale. And I forgot the specifics of where we landed, but there was some kind of a more frequent update, more frequent checking of the market, right? You're not just aging for data, and more frequent commitment to reviewing pay. And then, as you said, How safe how we communicate that to employees was really essential. So reach back into your experiences, what were other times where the markets were really volatile or something fundamental change? And were you able to grapple with that in a way that built ultimately build trust and wrestle the problem with those employees? Cool. I see. I think we have time for maybe one more question. I see a question about for professional services organizations kind of matching. You know, I think this is about how much do does our talent cost? And then how do we set our rates when we go have those folks work for our clients? So this could be lawyers, consultants, accountants, how do you manage a fast changing labor market on your supply side with how you set prices out to your clients? Kind of an interesting little bit more of a niche question i But there's something here we can learn to see if any ideas there.
Tauseef Rahman 44:27
Yeah, sure. You can comment on it right now working at a professional services firm ourselves, right. The you know, what we're encountering and this will probably not be a surprise for folks. On the other side of you know, working with a professional services firm is not regularly communicating to our clients, increasing kind of fees and bill rates over time right. has resulted some time is in a bit of a disservice for both ourselves and the client and not being able to have that discussion on, on kind of on market rate changes, right. And again, in plain English clients want to have the Statement of Work amount be the same into perpetuity. But the reality, as we all know, is wages are going up in their professional services environment. And they have been, but not passing them on to clients on a regular enough basis has caused, you know, that become a challenge. So what we've seen our other professional services clients do in terms of dealing with that is basically build in a time period for which certain rates will be set, and then renewed and reset so very much time limiting the value No, basically time value of money that's provided.
Charlie Franklin 46:04
Gonna hit pause there because we're at time, I just want to acknowledge before we wrap, I noticed a couple of questions about kind of where can we get market data and how does COMPA fit into all of this? Absolutely. Check us out to learn more, I'm gonna go ahead and put a QR code up on the screen. If you want to learn more about COMPA, you can contact Bobby here by scanning that QR code for all of you out there who are wrestling with defining market data in the era of pay transparency. I hope you found this conversation valuable. We intend to have more conversations like this. Thank you for joining today. Thank you to Tauseef for sharing all of your insights and I hope everyone has a great afternoon.